Alacero Summit 2025: John Lichtenstein highlights the growing challenge of China’s indirect steel exports
At the Alacero Summit 2025, John Lichtenstein, Managing Partner at World Steel Dynamics, delivered a compelling assessment of China’s expanding global footprint in steel and steel-intensive manufacturing, underlining the rapidly growing challenge posed by indirect steel exports.
In his presentation, Lichtenstein explained how China’s global indirect steel exports — steel embedded in manufactured goods — have exceeded direct steel exports since 2017. Following the pandemic, these exports increased sharply and have continued to accelerate in recent years, driven in particular by China’s surge in automotive exports.
A key structural shift highlighted during the speech is the evolution of China’s indirect steel exports from lower-value general metal products towards higher-value automotive and mechanical machinery products. Automotive-related indirect steel exports alone are estimated to reach up to 25% of total indirect steel exports in 2025, significantly increasing competitive pressure on steel-consuming industries worldwide.
Lichtenstein stressed that the scale and pace of growth in China’s indirect steel exports represent a major and expanding threat to steel industries and downstream manufacturing ecosystems. He called for continuous and structured monitoring of indirect steel imports, not only by product type but also by their role in local supply chains.
This includes understanding whether imports consist of components, final products or productive capital assets, how they integrate into domestic manufacturing chains, who owns the importing entities, and whether the output is destined for domestic markets or re-exported.
The presentation also highlighted the importance of closely assessing Chinese foreign direct investment (FDI). While some investments may support industrial development, others can weaken domestic steel-consuming value chains if not aligned with long-term industrial strategies.
Lichtenstein concluded by urging governments to ensure that incentives for foreign investment go beyond headline indicators such as total investment value or employment creation. These criteria, he argued, must be applied alongside a clear strategy to strengthen domestic manufacturing supply chains, including those reliant on steel.
The full intervention by John Lichtenstein is available on YouTube:
Marcegaglia ‘fairly positive’ on European steel demand for 2026
European steel demand is set to recover slightly in 2026, with prices already showing some signs of a rebound ahead of tighter trade measures and the rollout of the EU’s carbon border adjustment mechanism, according to Antonio Marcegaglia, chief executive of Italy-headquartered steelmaker and reroller Marcegaglia Group.
Although demand is “not brilliant”, the underlying trend in Europe remains somewhat positive, Marcegaglia said, adding that he expects a further gradual improvement driven by destocking, after what he described as an excessive build-up of inventories across the system.
“Overall, I am fairly positive about an increase in consumption on an annual basis, especially in the second half, because I believe there will be a destocking effect,” Marcegaglia said. “I think the system today is overloaded with inventories, so it is likely that the first quarter will see somewhat slower apparent demand. But final demand, I believe, will be overall slightly positive, with a recovery especially in the second part.”
Infrastructure spending, particularly in Germany and the mechanical engineering sector, is expected to perform better, while automotive demand is expected to remain broadly stable rather than contract.
The more decisive factor, however, is on the supply side. Marcegaglia expects steel imports into the EU to fall sharply as existing safeguard measures are replaced and CBAM-related uncertainty discourages shipments, the CEO told Platts in an interview this week. Platts is part of S&P Global Energy.
“As is well known, imports will be cut by 50% at least in the second half, but I also believe that the first half of the year will see a reduction due to CBAM uncertainties,” Marcegaglia said. “So even if it is not minus 50% over the full year, imports may be down 40% or 35% on an annual basis, as the first part of the year will also see some contraction.”
This tightening has already translated into firmer prices, he added. European hot-rolled coil prices, which had fallen to around Eur530-540/mt at their lowest level, have recovered by nearly Eur100, according to Marcegaglia. “We are seeing a significant rebound from the bottom, and there is room for it to continue,” he said.
CBAM
CBAM will add further upward pressure, he said.
“Some market participants talk about from Eur40 to Eur60 per metric ton, with some projections as high as Eur80-100…It is truly an unknown today. We are talking about around 8-10% of the product value, so in any case it is an additional important support to the price trend I have described,” he said.
Uncertainty persists around the technical details, with default CBAM values expected to be published in mid-December, while actual values — which are updated according to the new ETS — will likely be better understood in February.
“I say February for a truly accurate calculation, for a purely bureaucratic issue related to data processing, given the complexity of the rules under which CBAM was designed,” he said.
“So today we have an idea of the previous benchmark, but it needs to be updated in February. Therefore, anyone who wants to use the actual values will have to wait until February for an exact calculation and can only make estimates for now. We are in a somewhat unusual situation where this uncertainty does not allow for targeted decisions, and one has to take some risks by making estimates,” he added.
The application of CBAM starts in January, with responsibility and costs to be calculated from Jan. 1.
Platts assessed domestic HRC at Eur615/mt ex-works Ruhr Dec. 11, up Eur5 day over day, and at Eur595/mt ex-works Italy, unchanged day over day. Platts assessed imported HRC at Eur500/mt CIF Antwerp and Eur495/mt CIF Southern Europe, both stable day over day.
Fos-sur-Mer project
Meanwhile, Marcegaglia is pressing ahead with its flagship Fos-sur-Mer low-carbon steel project, which the group sees as central to its long-term competitiveness.
The project is currently in the engineering phase, developed in partnership with Danieli, and has already passed a key public permitting milestone, receiving what Marcegaglia described as a “clearly positive” orientation from authorities. Construction is scheduled to begin in the third quarter of next year, with production targeted by the end of 2028.
The facility will rely entirely on scrap and direct reduced iron, powered by nuclear-based electricity, making it fully decarbonized.
“It will be completely green, and also more competitive,” Marcegaglia said.
To secure DRI supply, the group is holding structured purchase discussions with projects in the Mediterranean region, including Libya and Oman, as well as Central Africa and Australia. These are supply agreements rather than equity investments.
Closer to home, Marcegaglia has taken a small equity stake in the nearby Gravity project, which aims to produce 1.5 million mt of hydrogen-based green DRI. While Gravity’s output is expected to come on stream after Marcegaglia’s electric arc furnace, the proximity offers a strategic future option.
EU HRC market steady as buyers step back, CBAM verification concerns mount
A Europe-based mill source said the revised default values were “impossible to work with,” estimating that the additional CBAM cost for some origins could reach Eur140-600/metric ton unless importers provide verified emissions data.
“They are practically prohibiting imports with these values,” he said, adding that verification will quickly become the only workable route for buyers next year.
Market participants said most buyers had already closed their 2025 purchasing and were unwilling to take further positions ahead of the year-end. Mills across Europe were reportedly sold out for January 2026, with February order books now under discussion.
A Northern Europe-based service center source said that while official domestic offers remained at Eur620-640/mt ex-works Ruhr, achievable levels were typically around Eur610-620/mt, with mills showing limited flexibility.
“Some producers are willing to close deals below their targets, but availability is still reasonable,” the same source said.
In Southern Europe, tradable values were indicated around Eur600/mt ex-works Italy for February delivery, with official offers heard at Eur620-630/mt. Several Italian mills had accepted small end-of-year discounts to secure tonnages, although buyers remained hesitant to commit.
The import market remained constrained by both quota uncertainties and CBAM-related risks. Second-hand offers were reported at Eur600-620/mt DDP Antwerp for Turkish-origin material, including CBAM costs, while large-tonnage Southeast Asian cargoes were heard at Eur470-480/mt CIF Italy, excluding CBAM. However, participants said the risks associated with using default values made such deals difficult to execute.
Platts assessed domestic HRC at Eur615/mt ex-works Ruhr in Northern Europe and at Eur600/mt ex-works Italy in Southern Europe, both unchanged day over day.
Platts assessed imported material into Northern Europe at Eur500/mt CIF Antwerp, and assessed prices in Southern Europe at Eur495/mt CIF Southern Europe, both unchanged day over day.
European plate market holds as CBAM concerns cloud import activity; slab dips on thin bookings
European plate prices remained largely stable in the week ending Dec. 12, with market participants reporting minimal changes in import levels and only selective upward movement in domestic tradable values.
Sources described a market that is active on paper but slow to convert into firm orders as buyers shift their focus to year-end coverage and the implications of upcoming Carbon Border Adjustment Mechanism default values.
Import plate offers remained unchanged for a second consecutive week. Suppliers quoted Eur630-640/mt DDP Spain and Eur660-670/mt DDP Italy and Germany for base-grade S235/S275 material. Traders stated that while these levels are workable, actual demand is constrained by uncertainty surrounding CBAM-related cost exposure for 2025.
Domestic pricing in Southern Europe continued to reflect February delivery discussions, with S275 tradable values reported at Eur650-670/mt ex-works. In Northern Europe, service centers cited workable plate levels around Eur700/mt EXW Ruhr, although they noted that most January capacity was already placed, limiting spot negotiations.
Market sources repeatedly pointed to CBAM as the key disruptor in both plate and slab procurement. Several buyers stated that default emissions values imply additional costs of Eur140-600/mt, making large-volume imports uncompetitive unless suppliers provide verified emissions data. One European mill described the situation as “a mess for plate and slab,” adding that next year’s import viability would hinge entirely on verification, rather than price.
Slab was unchanged week over week, with tradable values heard at $500/mt CIF Italy and offers from Asian origins at $520/mt CIF Italy. Transaction volumes were minimal, as both mills and buyers awaited clarity on Q1 documentation requirements. A service center reported similar levels at $500-$510/mt CIF Italy, noting that interest in slab was “limited to essential restocking only.”
Participants across the supply chain emphasized that most buyers were already covered for January and part of February, resulting in a quieter close to the year. A trader estimated that “big tonnages below 500 mt are the only ones moving,” with larger buyers delaying decisions until the impact of CBAM verification becomes clearer.
Platts, part of S&P Global Energy, assessed domestic plate at Eur650/mt ex-works Italy, up Eur5 week over week, and at Eur705/mt EXW Ruhr, stable week over week.
Platts assessed slab at $505/mt CIF Italy, down $5 week over week.
Thyssenkrupp to cut GOES production in Germany and France amid import surge in EU
Thyssenkrupp Electrical Steel (tkES), a subsidiary of German steelmaker Thyssenkrupp, has announced significant production cutbacks and temporary shutdowns at its Gelsenkirchen (Germany) and Isbergues (France) plants, citing a dramatic rise in low-priced imports, mainly from Asia, that has destabilized Europe’s grain-oriented electrical steel (GOES) market.
Starting mid-December, both plants will fully halt production until the year-end, while the Isbergues facility will operate at only 50 percent capacity for at least four months beginning January 2026. The company warns that approximately 1,200 jobs at both sites are now at risk.
Severe pressure on the market
According to Thyssenkrupp Electrical Steel, the EU grain-oriented electrical steel market has reached a critical point:
- Imports have tripled since 2022,
- Imports increased another 50 percent in 2025,
- Imported volumes are priced far below EU production costs.
This has triggered a sharp decline in customer orders and left EU mills with substantial under-utilization of capacity. tkES says immediate stabilization measures are essential to maintain operations, despite long-term demand projections showing that global grain-oriented electrical steel consumption may triple by 2050.
Two bids submitted for acquisition of former Ilva plants in Taranto
Two bids have been submitted by the deadline set at midnight on December 11 for the acquisition of the business units of the former Ilva plants in Taranto in southern Italy, according to a statement released on December 12 by the extraordinary commissioners of Acciaierie d’Italia in Extraordinary Administration and Ilva in Extraordinary Administration, who specified that the offers were submitted by Bedrock Industries and Flacks Group.
Both bids concern the acquisition of the entire business perimeter and were duly filed in accordance with the terms and conditions set out in the tender procedure. The extraordinary commissioners will now proceed with the examination of the proposals to assess their completeness and compliance with the requirements outlined in the tender.
The tender procedure remains open. As provided for in the call for bids, additional interested parties may still submit further offers, provided that these are improved proposals compared to those already received.
The submission of the two bids represents a significant step in the divestment process of the former Ilva assets, which continues to unfold within a complex industrial, financial and institutional framework.
As previously reported by SteelOrbis, the sale process is closely intertwined with ongoing discussions on the decarbonization plan for the Taranto steelmaking site, including talks on the future DRI hub, energy supply solutions and the financial resources required to ensure production continuity during the transition phase. At the same time, key issues remain open regarding the overall economic sustainability of the operation and the employment safeguards requested by trade unions.
The assessment of the bids submitted and the possible entry of additional bidders will therefore be crucial in determining the next steps of the procedure and the future industrial outlook for Italy’s largest steelmaking hub.
Romanian flats spot prices stable, but sizeable discounts reflect liquidity and demand challenges
Romania’s flat steel spot market has remained stable this week, but trading conditions continue to reflect weak demand, high inventories and tight liquidity. Although CBAM-related expectations initially suggested firmer prices, this has not materialized as year-end seasonality and upcoming holidays have further slowed purchasing activity.
Market participants report that sizeable discounts remain available, particularly for advance payments and larger tonnages, highlighting buyers’ reluctance to commit and the ongoing pressure on sellers to secure cash flow in a subdued market.
As a result, spot market pricing has held steady, with hot rolled sheet (HRS) still quoted at €710-735/mt ex-warehouse and cold rolled sheet (CRS) offered at €825-845/mt ex-warehouse, both unchanged from the previous week. However, despite the apparent stability, the real trading levels in the market continue to differ noticeably. Several traders report that meaningful business is only taking place when discounts are granted, especially for buyers able to commit to larger tonnages and provide advance payment. Under these conditions, HRS has been transacted at significantly lower workable levels of €680-690/mt ex-warehouse, while CRS has been heard at €775-790/mt ex-warehouse.
Meanwhile, the sole Romanian flat steel producer, Liberty Galati, has remained inactive, with no new announcements regarding its future. The company’s situation continues to look uncertain, as court proceedings are still ongoing and many workers are seeking alternative employment while a large number reportedly have yet to receive their unpaid salaries.
In the import segment, activity has remained limited as Romanian buyers continue to scale back purchases heading into the year-end, with slow domestic demand further reducing interest in new bookings. Despite this muted buying environment, most suppliers have held their prices steady over the past week, and only minor adjustments have been observed. According to market sources, the Ukrainian mill has kept its offers unchanged, continuing to quote hot rolled sheet (HRS) at €650-660/mt CPT and cold rolled sheet (CRS) at €740-750/mt CPT. A Slovakian supplier has also maintained stable pricing, offering HRS at €660-670/mt CPT, the same levels reported previously. In contrast, Turkish mills have made a slight downward adjustment on the upper end of their offer range. Their HRC prices for January shipment now stand at €475-490/mt CFR, compared with last week’s €475-495/mt CFR. These levels include estimated freight costs of €15-20/mt and remain duty-free depending on origin, though Turkish material continues to be subject to EU antidumping duties.
European longs market quiet amid CBAM anticipation and upcoming winter holidays
No major changes have been reported in the European longs market this week. Most discussions among players have been focusing on the long-awaited release of official benchmarks and default values for CBAM calculation costs, as product prices seem to have remained stable and demand is weak ahead of the Christmas holidays.
“We are trying to sustain our [rebar sales] prices,” a source at an Italian mill said. Reported levels, however, have not changed since last week’s increase attempts, remaining in the range of €300-320/mt ex-works base (€560-580/mt ex-works including regular extras).
The same applies to the Italian wire rod market, where December prices have consolidated at €570-585/mt delivered for drawing quality and €550-565/mt delivered for mesh quality.
Market talk has been mainly focusing on anticipation regarding CBAM growing among steel market players in all segments in Europe. In fact, according to some rumors circulating, official EU benchmarks and default values for CBAM calculation costs are to be announced on December 16. “I hope [the values] will help us figure this out, because everything is so unclear,” a source commented. “We’ll have some fun next week,” another source added.
In the meantime, no updates have been released for rebar export prices in Spain, which remain at €570/mt FOB.
Little upward movements, however, have been reported in the import market from Turkey. With the euro-dollar exchange rate unchanged at 1.17, Turkish rebar prices have been reported at €510-520/mt CFR and wire rod prices at €520-530/mt CFR, up by around €5/mt compared to last week. Prices from Egypt have been reported at €500/mt CFR for rebar – up by €5/mt week on week – and at €505-510/mt CFR for wire rod, stable week on week. Finally, prices from Algeria have decreased by €15/mt week on week, standing at €490/mt CFR and €495/mt CFR, respectively, for rebar and wire rod.
Europe sees continued standstill in HRC trading amid regulatory uncertainty
Market participants across Europe described another day of subdued activity, with both buyers and mills showing little urgency to conclude fresh HRC business. High inventories at service centers and distributors, together with comfortable order books at mills, kept trading largely hand-to-mouth. Several sources said both sides were effectively postponing meaningful decisions until January, when the market expects clearer signals following the holiday slowdown and the full implementation of the Carbon Border Adjustment Mechanism (CBAM).
Sentiment across the region remained dominated by trade regulation shifts, notably the imminent rollout of CBAM. Market participants continued to digest the European Commission’s newly accepted benchmarks and default emissions values, which several traders said would sharply increase the cost of imports from January onward. Fastmarkets’ estimates pointed to CBAM charges for imported HRC of roughly €23-540 ($26-632) per tonne, depending on origin, rendering most import options unviable in the near term.
The shift was expected to give European mills room to attempt price increases in the first quarter of 2026, although demand-side constraints were widely expected to cap any significant upward momentum.
Northern Europe
Northern European buyers reported that stocks remained more than sufficient to cover short-term needs and availability of imports currently in ports also eased any supply concerns.
Domestic mills, meanwhile, were largely sold out for January and, in several cases, partly for February, offering little volume into the spot market and focusing on long-term contract negotiations with automotive original equipment manufacturers (OEMs). As a result, workable prices in the region continued to cluster around €610-630 per tonne ex-works, with offers heard at €630-650 per tonne ex-works depending on source and delivery window. Larger-volume negotiations at 3,000-5,000 tonnes could touch €600 per tonne ex-works, but such volumes were rarely discussed in recent weeks.
“Nobody buys large tonnages these days — trading is mainly hand-to-mouth,” a buyer in the Benelux area said.
Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe reflected this standstill in the market, holding in the €621-623 per tonne range throughout the week. Minor day-to-day fluctuations marked a generally flat market, although month-on-month changes still indicated a modest upward trend.
Notably, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was €621.67 per tonne on Friday, up by €0.50 per tonne from €621.17 per tonne on Thursday December 11.
The index was down by €0.83 per tonne week on week but up by €10.00 per tonne month on month.
Italy
Italian market conditions mirrored those in the north, with trading exceptionally slow. Local suppliers were sold out for January and targeting €610-630 per tonne ex-works for February delivery, but actual transactions remained scarce.
Buyers reported achievable levels between €600 per tonne and €620 per tonne ex-works, noting that mills held firm on offers.
“Suppliers closed January order books and gradually hope to achieve increases in the first quarter because new imports become totally unmanageable with CBAM rollout,” a buyer in Italy said.
Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €611.25 per tonne on Friday, down by €1.25 per tonne from €612.50 per tonne on Thursday.
The index was down by €2.08 per tonne week on week but up by €13.33 per tonne month on month.
Meanwhile, imports into Italy also slowed [LINK]. While some big buyers continued to book overseas coil despite the regulatory uncertainty, most market participants preferred to wait for clearer guidance on CBAM cost implications and remaining safeguard quotas.
Italian rerollers and buyers call CBAM values ‘unworkable’; actual emissions verification a priority in 2026
Finalized benchmark and default values
Under the EU’s CBAM steel regime, benchmark values are standardized carbon-intensity reference figures used to calculate the embedded emissions cost of imports based on typical production pathways.
Default values are preset emissions figures applied when verified actual emissions data is not available and are deliberately set higher to encourage reporting.
In the latest European Commission CBAM draft documents, finalized slab default values for origins such as China were set at higher levels than in previous drafts and very high defaults for some major slab-exporting countries were confirmed, Fastmarkets reported on Wednesday December 10.
Russia is the largest supplier of slab to Europe, with other key exporters including China, Indonesia, India, Brazil and Vietnam. Based on finalized default CBAM values for 2026 estimated by Fastmarkets, the estimated costs for slab imports using default emission intensities are approximately €144 ($168) per tonne for China, around €149 per tonne for Russia, about €230 per tonne for India and €541 per tonne for Indonesia, while Brazil’s defaults are calculated at a comparatively lower €22 per tonne.
The latest documentation also includes future annual mark-ups from 2026 onward, with default values set to rise annually to 10% in 2026, 20% in 2027 and 30% from 2028 onward, reflecting CBAM’s phase-in and the declining availability of free allowances in the EU Emission Trading System (ETS).
‘Unworkable’ default values and actual emissions verification
One plate producer source said the benchmark figures did not come as a surprise to market participants but added that the final default values with mark-ups included were a ‘blow’ to Italy’s slab and plate markets, which are heavily reliant on slab imports as feedstock for flat steel production.
“The final default values practically make CBAM reporting by defaults infeasible for most importers. It will be the year of convulsive verifications of actual emissions,” the producer source said.
A second slab buyer said the default values are ‘unworkable’ for many major exporting countries.
Sources said the biggest issue in the new year, once CBAM enters its definitive phase, will be ensuring slab suppliers fulfill their obligations to verify and report their actual emissions.
Emissions verification
From 2026, the EU has stated in regulatory documents that CBAM will require imported steel slab emissions to be verified by an accredited third party and the technical methodology may not need to be completely novel.
Sources said CBAM emissions verification could resemble established processes such as those used for Environmental Product Declarations (EPDs), with verifiers like TÜV, DNV and others already equipped to conduct audits and site checks.
But industry sources noted concerns that geopolitical tensions and varying regulatory capacity across exporters could make it harder for some countries to provide the credible, verified emissions data required under CBAM.
Risks with payments deferred
Sources also noted that CBAM duties will not be paid at the point of import in 2026. Instead, the definitive CBAM regime starts on January 1, 2026 and importers will first be required to purchase and surrender CBAM certificates in 2027 covering the embedded emissions of goods they imported in 2026, with annual declarations and payments due by then.
This deferred payment timing means companies will carry the cost through 2026 but only cash out when certificates are surrendered the following year, raising concerns among some producers about cash-flow pressure and insolvency risk if large volumes are imported before costs crystallize.
Slab market update
Currently, the Italy’s slab import market has stalled due to uncertainty around CBAM, with buyers said to be withholding from purchasing because of CBAM-cost considerations and a lack of clarity around whether suppliers, importers or end-users will take on the CBAM cost burden.
So far, Fastmarkets has not heard import offers from suppliers with CBAM costs included, as has been observed in downstream steel markets such as heavy plate and hot-rolled coil.
Fastmarkets’ weekly price assessment for steel slab import, cif Italy was $500-520 per tonne on Thursday, unchanged since November 6.